Embraer’s Eve in $2 Billion Merger Talks With Zanite SPAC

Brazil’s Embraer SA surged as much as 15% Thursday after confirming that it’s in talks to merge Eve Urban Air Mobility, its electric vehicle takeoff and landing unit, with Zanite Acquisition Corp.

The talks with the special purpose acquisition company are ongoing and could end without an agreement, Embraer said Thursday in an emailed statement, confirming an earlier Bloomberg report. The deal is slated to value the combined entity at about $2 billion, according to people with knowledge of the matter, although terms could change.

Shares of Embraer surged 12% to 19.38 reais at 11:25 a.m. in Sao Paulo, and earlier climbed as high as 19.94 reais.

Zanite is led by co-Chief Executive Officers Kenn Ricci, co-owner of Directional Aviation Capital, which controls private-jet flight provider Flexjet, and Steve Rosen, co-founder of private equity firm Resilience Capital Partners. The Cleveland-based SPAC raised $230 million in a November initial public offering.

Ricci, the founder of several private-jet companies, bought Flexjet from transportation firm Bombardier Inc. in 2013. The company sells partial ownerships in its fleet of business aircraft, enabling members to fly privately without having to buy planes outright, and competes against NetJets, owned by Berkshire Hathaway Inc.

Eve Urban Air Mobility makes eVTOLs, which have been dubbed flying taxis. Led by CEO Andre Stein, the company this week struck a partnership with Helisul Aviation, a Brazilian helicopter operator, that involves an order of as many as 50 eVTOLs, with deliveries slated to begin in 2026.

“Disruptive urban air mobility solutions can bring same type of benefits that aviation already brought to longer trips literally closer to people, giving urban commuters more options to move around the city,” Stein said in a statement announcing the partnership.

Last week, Eve said it struck a partnership with Halo Aviation Ltd., a helicopter travel provider in the U.S. and U.K., which features an order for 200 of Eve’s eVTOL aircraft with delivery commencing in 2026. Halo is part of Ricci’s Directional Aviation.

Other eVTOL companies including Joby Aviation, Lilium GmbH and Archer Aviation Inc. have agreed to go public through SPAC mergers.

Blade Air Mobility Inc., a provider of short-distance flights, went public last month after merging with a SPAC. The company, which has ordered eVTOLs, has said it intends to transition to electric vertical aircraft from conventional helicopters, citing a reduced carbon footprint, less noise and lower operating costs.

©2021 Bloomberg L.P.

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